Threat to jobs as retailer closes 25 high street shops

Hundreds of staff across the region turned up for work yesterday to be told the shops had closed after its owner, Northern Electric Retail, and Gateshead parent company Shop Electric Group went into administration.

Company bosses have handed control to administrators KPMG, who have closed all the stores for a minimum of three days to carry out a stock take.

Richard Fleming, KPMG corporate recovery partner, said: "Northern Electric and Shop Electric have suffered from competitive pressures and squeezed margins as the pre-Christmas seasonal upturn has failed to emerge.

"We hope to sell as many of the stores as going concerns, and we will decide early next week whether to open some of the retail stores."

He would not comment on the future of the stores, but it appears that at least some, if not all, will stay closed - sparking fears of job losses.

Hundreds of customers who had ordered goods in the run-up to Christmas could also be left out of pocket.

Last month, Shop Electric bought B2C Support Services, a warranty support company with 200,000 customers on its books, turning over 50,000 repair orders a year.

This has also gone into administration, along with a further 35 Northern Electric stores in Northern Ireland.

Although the domestic appliance stores still under the Northern Electric brand, they are not connected with Northern Electric plc, which is primarily an electricity distribution business. It sold the retail arm of its operations to the Shop Electric Group in June last year.

The group employs about 500 people in the region and has an annual turnover of £80m.

Earlier this week, Northern Electric Retail reported a huge rise in sales of electric fires for the period July to September - up 60 per cent on last year.

It also launched a business-to-business sales division last September.

No one was available for comment at the group's Gateshead headquarters yesterday.